(Image courtesy tradebit)
Amazon is moving to keep publishers and authors happy…they’ve just announced a new royalties program designed to give 70% to the author and publisher. It’s a far better deal, given that currently authors are receiving 7-15% from paper books and 25% from ebooks, according to Amazon’s math. Before any authors start mentally spending that extra cash, keep in mind this does not go into effect until June 2010…so you might need to wait before you blow these extra royalties on an Apple tablet Kindle.

From Amazon’s press release:

SEATTLE, Jan 20, 2010 (BUSINESS WIRE) — Amazon.com (NASDAQ:AMZN) today announced details of a new program that will enable authors and publishers who use the Kindle Digital Text Platform (DTP) to earn a larger share of revenue from each Kindle book they sell. For each Kindle book sold, authors and publishers who choose the new 70 percent royalty option will receive 70 percent of list price, net of delivery costs. This new option will be in addition to and will not replace the existing DTP standard royalty option. This new 70 percent royalty option will become available on June 30, 2010.

Mobileread linked to a very interesting theory on why Amazon has chosen to announce this particular author deal (and in light of the 6 month lead time to get it off the ground I am inclined to agree): They’re terrified of Apple coming in with a better deal for content providers. Idealog has reported that Apple is working with publishers to revamp how ebooks are distributed and sold, and that could spell disaster for Amazon, Barnes and Noble, and the other ebook resellers if they don’t strike back quickly. Essentially, the rumored deal looks something like this:

-Instead of the retailer (Apple) paying the wholesale price for the ebooks and then setting their own resale price, the publisher would set the price and Apple would get a commission. Suddenly the power of pricing is out of the retailers hands, and into the hands of people who would love to gain back their $20/book new releases.

-This “great deal” is only being negotiated with the big publishing houses; smaller publishers won’t have the same advantage of negotiating for a great payday from Apple.

-Presumably part of this includes the “enhanced” ebooks, though, again, what makes an ebook enhancement WORTH an extra ~$10 is a mystery.

Personally, I think if Apple and the publishers set the pricing too high, they’re missing the boat. Ebooks would have supported higher pricing a year ago, but there’s far too many stores offering cheaper options. Apple should know this as well as anyone, since the App Store is basically the poster child for downward pricing pressure!

As to whether Amazon chose to offer up their deal ahead of Apple’s announcements, it could be. But that’s what competition and capitalism are all about. Companies try to offer better deals, and one-up each other for the edge. The one good point in all this is that it shakes free the idea that ebooks should be distributed and paid for in the same way as physical items. I just hope these changes are as good for the consumer (and for the authors) as they are to the publishers.

Via mobileread